20220705IPC to Staff 1-21.pdf

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DONOVAN WALKER
Lead Counsel
dwalker@i dahooower.com
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Enclosures
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July 5, 2022
VIA ELECTRONIC FILING
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, ldaho 83720-0074
Re Case No. IPC-E-22-13
ln the Matter of ldaho Power Company's Application for a Certificate of
Public Convenience and Necessity to Acquire Resources to be Online by
2023 to Secure Adequate and Reliable Service to its Customers
Dear Ms. Noriyuki
Attached for electronic filing please find ldaho Power Company's Response to the
First Production Request of the Commission Staff in the above matter.
Due to the voluminous nature of non-confidentia! and confidential information
provided in response to data requests in this case, the Company is posting the
attachments to these requests to the secure FTP site to allow the parties to view the
requested information remotely. Because aftachments contain confidential information,
the FTP site is divided between confidentia! and non-confidential information. The login
information for the confidential portion was provided to those parties who have executed
the ProtectiveAgreement in this matter on June 2,2022. The non-confidential information
will be provided in a separate emailto all parties.
Please feel free to contact me directly with any questions you might have about
this filing.
Very truly yours,
Donovan E. Walker
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwa lker@ ida hopower.com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICAT]ON FOR A
CERTIFICATE OF PUBLIC CONVENIENCE
AND NECESSITY TO ACQUIRE
RESOURCES TO BE ONLINE BY 2023TO
SECURE ADEQUATE AND RELIABLE
SERVICE TO ITS CUSTOMERS.
CASE NO. IPC-E-22-13
IDAHO POWER COMPANY'S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
THE COMMISSION STAFF
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COMES NOW, ldaho Power Company ("ldaho Powef' or "Company"), and in
response to the First Production Request of the Commission Staff ('IPUC or
Commission") dated June 14, 2022, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF.l
REQUEST FOR PRODUCTION NO. 1: ln reference to ldaho Power's peak
electric energy need identified in 2023. Application at2. Please provide the following:
a. Please identify all potential resources considered by the Company to offset the
capacity need.
b. For each resource identified above, provide the size in megawatts ("M\M) and
its effective load carrying capacity ("ELCC').
c. Please explain the process and criteria used to select a Battery Energy Storage
System ("BESS') as compared to the other resources identified above. Please
include all workpapers and analysis used to conduct the selection process.
RESPONSE TO REQUEST FOR PRODUGTION NO. 1:
a. ldaho Power accepted any resource if it met the functionality criteria outlined
in the RFP. However, the Company focused the solicitation on products as
having the most realistic potential to be in-service by June 2023 including
energy storage products, solar photovoltaic ("PV') projects, solar PV plus
storage projects, wind projects, and wind plus storage projects.
b. The following identifies the size and ELCC of each resource considered by the
Company:
Namplatc
(Mw)
Lsst-In
ELCC
82.$ff/o
63.00Yo
c. As detailed in the Direct Testimony of Mr. Hackett, following a threshold screen
of all project submittals, qualitative and quantitative evaluations were
performed iteratively. The qualitative evaluation ranked the proposals based
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF.2
40
80
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on feasibility, capability, counterparty profile, and company stewardship while
the quantitative evaluation ranked proposals by cost. Additionally, parallel to
the issuance of the RFP and driven by concem that the Company may not
receive bids with a June 2023 in-service date or projects with sufficient capacity
to meet peak summer demand, ldaho Power investigated different
configurations and locations of Company-owned and constructed battery
storage systems. Ultimately only one project was able to meet the required
commercial operation date of June2023, a 40 MW solar PV plus 40 MW energy
storage project. Because the standalone 40 MW solar PV plus 40 MW energy
storage project will not be sufficient to fully meet the 2023 capacity need, ldaho
Power also identified an additional energy storage resource through the
investigation into different configurations of Company-owned and constructed
BESS's, an 80 MW storage facility. Please see Confidential Attachments 9
through 13 to the Company's Response to the lndustrial Customerc of ldaho
Power ("lClP) Production Request No. 1 for the workpapers and analysis used
to conduct the selection process. ln addition to Confidential Exhibit No. 3
that presents the results of the project submittals evaluation, Confidential
Attachment 1 includes the analysis performed to compare the self-build option
against proposals received in response to the RFP.
The response to this Request is sponsored by Eric Hackett, Projects and Design
Senior Manager, and Jared Ellsworth, Transmission, Distribution & Resource Planning
Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 3
REQUEST FOR PRODUCTION NO. 2: Did the Company consider a battery
demand response program, similar to the PacifiCorp Wattsmart Battery Program
available to customers of Rocky Mountain Power in southeastern ldaho? lf so, please
provide the Company analysis used in considering the program for meeting the
Company's peak electric energy need identified in 2023. lf the Company did not consider
a similar program, please explain why.
RESPONSE TO REQUEST FOR PRODUCTION NO. 2: The Company did not
consider a battery demand response program due to the near-term nature of the need
and the inability of such a program to provide sufficient capacity on such a rapid timeline.
For example, per Rocky Mountain Power's application in PAC-E-21-16, the Wattsmart
Battery Program is forecast to achieve approximalely 10 MW of baftery demand response
by 2029.
The response to this Request is sponsored by Jared Ellsworth, Transmission,
Distribution & Resource Planning Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 4
REQUEST FOR PRODUCTION NO. 3: Please answer the following items related
to control of the facility:
a. Please explain in detail the meaning of "fully controlled" in reference to a
dispatchable resource. Application at 5.
b. Please explain why the necessary level of controlwould be impossible to obtain
through a Purchase Power Agreement ('PPA").
c. ls the Company aware of other PPAs with other utilities that provide similar
levels of dispatchability and control.
RESPONSE TO REQUEST FOR PRODUCTION NO. 3:
a. "Fully controlled" in this context refers to sources of electricity that can be
dispatched on demand by ldaho Power according to both operational and
market needs, can contribute to peak capacity needs to reliably serve
customers, can be dispatched to reliably integrate intermiftent energy
resources, and provide ldaho Power with oversight of maintenance activities to
ensure reliable operation. ln contrast to non-dispatchable renewable energy,
a fully controlled resource such as a Battery Energy Storage System ('BESS')
can rapidly compensate for intermittent resources. ldaho Power will have full
control to charge and discharge the BESS to contribute to load serving
operations and most effectively respond to current and future market, load
seryice, and reliability conditions in real-time, which results in both reliability
and economic benefits for customers.
b. As described beginning on page 15 of the Direct Testimony of Mr. Tatum, given
the short turn-around to construct a resource to meet 2023 capacity needs,
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 5
coupled with global supply-chain disruptions stemming from the COVID-19
health crisis, ldaho Power was concerned that it could not adequately address
important operational and policy conc€ms with regard to third-party ownership
of battery storage resources in the already-compressed timeframe. Given
these concerns, the request for proposals ('RFP') issued by ldaho Power to
meet expected 2023 capacity needs allowed for PPA arrangements for wind
and solar facilities but required a proposal for Company ownership for storage
resources. lt should also be noted that ldaho Power's RFP issued on December
30, 2021, for resource needs in 2024 and 2O25, was broadened to include
different ownership arrangements. ldaho Power believes the December 2021
RFP allows for slightly more time (albeit still a very compressed schedule) to
determine whether the operational needs discussed in Part A to this response
can be met through a third-party owned battery storage agreement.
Although lt may be theoretically possible to structure a third-party
ownership arrangementforallpotentialfuture needs, ldaho Powerbelievesthat
ownership ensures the most flexible operation, today and in the future. ldaho
Power ownership and operation will allow the Company, in real-time, to control
dispatch decisions in a waythat is most beneficialto customersfrom a reliability
and economic perspective as well as adjust future operations to meet cunent
conditions. The term "real-time" is important in this context because it would be
impossible to predict the most effective use and operation of a resource 10-20
years in advance through a contractual arrangement. This is especially the
case in the context of the Energy lmbalance Market ('ElM") and potentialfuture
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 6
day-ahead markets. As part of the ElM, ldaho Powefs resources are ramped
up and down instantly and flexibly for participants to achieve the most
economical solution to energy needs. lt is not yet fully known how ldaho Power
will most effectively use batteries in potentialfuture day-ahead markets, which
is why operational flexibility and control will be important for ldaho Power and
its customers. A BESS resource is not unique to other Company owned
resources in that ldaho Power has recently adjusted resource utilization and
dispatch to effectively integrate intermiftent resources and participate in
evolving markets such as the EIM to serye customers reliably and
economically. Company owned resources have allowed the company to
maximize value and minimize costs to customers because these resources
have allowed the Company to modify operations, adapt to market constraints,
and facilitate resource adequacy in a flexible environment. lndustry and market
changes suggest a higher value on flexibility of operations without limitations
of long-term static contracts that may not keep pace with future market needs.
c. ldaho Power is not aware of a BESS PPA that provides the utility with
unfettered control of the asset. At the time ldaho Power issued the RFP, the
Company performed due diligence to determine whether BESS Power
Purchase Agreements ("BESS PPAs") would allow utilities (orthe EIM) to have
full control of the BESS's dispatch (without regard to "must pay" implications)
to take advantage of real-time market and reliability conditions. The ability to
use the BESS as an economic dispatchable resource for reliability and load
service as needed without the obligation to pay for a BESS PPA regardless of
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCT]ON REQUEST OF THE
COMMISSION STAFF - 7
intended usage maximizes the asset benefit over the life. Among other things,
ldaho Power met with an attomey that negotiates BESS agreements worldwide
who advised that contractua! limitations are specified. Put another way, there
were few (if any) rights in BESS PPAs that would allow utilities to flexibly modify
contractual obligations under real-time market conditions. These "must pay"
provisions of PPA's could, among other things, force ldaho Power to discharge
(and furtherdegrade) batteries even when negative pricing exists in the market.
As of June 22, during 2022 ldaho Power has experienced negative market
conditions for 288 hours. Many experts believe negative pricing market
conditions will increase as more renewables are added to the grid. This affords
Idaho Power an opportunity to reduce customer power supply costs if it can
charge the batteries during negative market conditions, and that requires ldaho
Power's grid operators to have visibility and controloverthe timing and charged
state of the bafteries. !n addition, ldaho Power could be part of an entirely
different energy market in the foreseeable future - such as the California
lndependent System Operator's extended day ahead market or Southwest
Power Pool's Market+. Because these markets are largely undefined at this
time, the Company is unable to pre-determine which contractual terms are
necessary for optimal use of a resource within a market. Pre-existing
contractual limitations would restrict ldaho Power's ability to make decisions
and may result in uses of the resource in these potential markets in a manner
that is not in the best interests of its customers.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF.8
Through investigation of other utilities' RFP's and industry research, ldaho
Power encountered the concept of a tolling arangement for capacity resources
(such as BESS). ln theory, under this type of agreement, the buyer (e.9., a
utility) pays the seller a fixed (usually monthly) capacity charge for its right to
utilize the baftery's capacity within negotiated parameters set forth in the
agreement which specify the use and flexibility as compared to full company
ownership and control. ldaho Powe/s understanding is that these agreements
still limit a utility's ability, pursuant to the contractual agreement, to modify the
operationa! characteristics of the BESS in real-time (for example, the number
of charge and discharge cycles per day or year).
The response to this Request is sponsored by Eric Hackett, Projects and Design
Senior Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 9
REQUEST FOR PRODUCTION NO. 4: Please answer the following regarding
the Company's need to own the BESS versus procuring the resource through a PPA.
a. PIease provide the criteria the Company used to determine whether the
Company needs to own the resource versus the resource being
provided through a PPA.
b. Please explain how Company ownership either meets or fails to meet
each criterion and to what extent. Please provide specific evidence to
support the rationale.
c. Please explain how a PPA either meets or fails to meet each criterion
and to what extent. Please provide specific evidence to support the
rationale.
d. Please explain the decommissioning risks associated with a Company-
owned BESS as compared to the decommissioning risk of the BESS
through a PPA.
e. Where the Company identified deficiencies of obtaining the resource
through a PPA as compared to the resource being Company-owned,
please provide specific examples where these deficiencies have
occuned and quantify the impacts to economic, operational,
ma intena nce, rel iabi lity, and reg ulatory factors.
RESPONSE TO REQUEST FOR PRODUGTION NO. 4:
a. - c. ldaho Power uses a competitive procurement process to determine
the least-cost, least risk resources necessary to fil! capacity deficiencies.
For a detailed discussion of the criteria used to evaluate all resources,
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 1O
please see the Direct Testimony of Mr. Hackett. For a discussion of the
considerations that led to the requirement for Company ownership of
battery resources, please see the Company's Response to Staffs
Request No. 3b. The Company's Response to Staffs Request No. 3c
further discusses the pros and cons of Company ownership as
compared to third-party owned arrangements.
d. ldaho Power did not analyze decommissioning risks associated with a
Company-owned BESS as compared to the decommissioning risk of the
BESS through a PPA. However, as explained in the Company's
Response to Staffs Request for Production No. 5, ldaho Power
anticipates the decommissioning risk is minimal due to the expected
mature market to recycle the metals that will remain in the battery when
they reach the end of their life.
e. Please see the Company's Response to Staffs Request for Production
No. 3 for a discussion of economic, operational, maintenance, and
reliability impacts. ln addition to the items discussed in the prior
response, there mayalso be a costto customerswhen a contracted PPA
does not actually come online when expected due to circumstances that
the Company cannot control, as evidenced by claims of force majeure
ldaho Power received from Jackpot Solar and its PPA for 120 MW of
solar scheduled to be online by December 2022, and72 MW of PURPA
solar contracts for incremental resources in Oregon that have been
executed and were anticipated to be onlinein2024.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF. 11
The response to this Request is sponsored by Tim Tatum, Vice Fresident of
Regulatory Affiairc, ldaho Power Company.
IDAHO POVI/ER COMPANYS RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 12
REQUEST FOR PRODUCTION NO. 5: Please provide an analysis regarding
decommissioning of the 120 MW BESS at the end of its operational life. Please include
specific decommissioning costs, the potential for salvage, and issues related to
environmental d isposa! im pacts.
RESPONSE TO REQUEST FOR PRODUCTION NO. 5: The Company has
discussed decommissioning costs with the developers and manufacturers. The amount
of lithium and other valuable metals remaining in the batteries at their end of life is
estimated to be substantia!. A mature market to recycle theses metals is forecasted. ln
some scenarios, recyclers would pay ldaho Power to take the batteries and mine the
lithium and other valuable metals remaining in the batteries. Some bidders indicated they
would take the batteries back in 20 years and require only shipping to their facilities, with
some locations in the United States and some in Asia. Because of the range of potential
positive values offsetting costs related to decommissioning in 20 years, the Company has
assumed no net decommissioning costs.
The response to this Request is sponsored by Eric Hackett, Projects and Design
Senior Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 13
REQUEST FOR PRODUCTION NO. 6: Please provide the executed contract and
documents describing the technical specifications for the facilities. Application at 6.
RESPONSE TO REQUEST FOR PRODUCTION NO. 6: Please see Confidentia!
Attachments 11 and 12 to the Company's Response to lClP's Request for Production No.
1 for the executed contracts for the 40 MW BESS and the 80 MW BESS, respectively.
Exhibit C to the 80 MW BESS contract includes the technical specifications for the facility.
As can be seen in the 40 MW BESS contract, Exhibit C was not finalized at the time of
execution but has since been completed and is included as ConfidentialAttachment 1 to
this response.
The response to this Request is sponsored by Donovan Walker, Lead Counse!,
ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 14
REQUEST FOR PRODUGTION NO. 7: ls there a contingency indudd in the
mntract requiring a CPCN?
There is no mntingency
included in the mntracts executed with Powin Energy Corporation.
The response to this Request is sponsored by Eric Hackett, Prcjects and Design
Senior Manager, ldaho Power Company.
IDAHO POI/I'ER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF.15
REQUEST FOR PRODUCTION NO. 8: ldaho Commission RFP guidelines, per
Commission Order No. 32745, require the Company to 'comply with RFP guidelines
applicable in its Oregon service area." Please list allthe RFP guidelines the Company is
out of compliance with.
RESPONSE TO REQUEST FOR PRODUCTION NO. 8: ldaho Power is not out
of compliance with any of the Public Utility Commission of Oregon's ("Oregon
Commission") Competitive Bidding Rules. As described in the Company's Response to
lClP's Request for Production No. 12, the Company filed a Notice of Exception of the
Competitive Bidding Rules with the Oregon Commission, detailing the circumstances
related to a time-limited opportunity to acquire a resource of unique value to the
Company's customers. When this exception to the Competitive Bidding Rules applies,
pursuant to Oregon Administrative Rules 860-089-100(4), the Company files a report with
the Oregon Commission explaining the relevant circumstances of the acquisition. ldaho
Power fifed this report on March 18,2022, included as Confidential Attachment 1 , and is
cunently compliant with the Oregon Commission resource acquisition process.
The response to this Request is sponsored by Donovan Walker, Lead Counsel,
ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 16
REQUEST FOR PRODUCTION NO.9: Please provide the Company's request
for a waiver of Oregon's RFP rules, Oregon Staffs testimony and/or comments regarding
the waiver request, and the Oregon Commission's final order.
RESPONSE TO REQUEST FOR PRODUGTION NO. 9: Please see the
Company's Response to Request for Production No. 8. As described in the Company's
Response to lClP's Request for Production No. 12,the Oregon Commission will not issue
a ruling in response to the report.
The response to this Request is sponsored by Donovan Walker, Lead Counsel,
ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCT]ON REQUEST OF THE
COMMISSION STAFF - 17
REQUEST FOR PRODUCTION NO. 10: Please explain, in detail, the risk to the
Company's financial health if the 120 MW BESS is not Company-owned. Application at
3.
RESPONSE TO REQUEST FOR PRODUCTION NO. 10: Utility ownership of
supply-side capacity resources is beneficialto customers, the utility and ldaho's regulated
utility model. As a "public utility" pursuant to ldaho Code S 61-129, the Company
exclusively provides its service to the public in a specified geographic region and has an
obligation to provide adequate, efficient, just, and reasonable service on a
nondiscriminatory basis to all those that request it within its certificated service area.
ldaho Code SS 61-302, 61- 315, 61-507. As part of the regulatory compact, ldaho Power
must serve all customers in the service area, in exchange for its exclusive right to provide
retai! electric service within the service area. The compact provides ldaho Power the
opportunity to earn a reasonable return by investing capital into the resources and
systems necessary to perform its service obligation. At the same time, the Commission
has oversight of the provision of that service and must ensure that the rates ldaho Power
charges its customers and that the rules and regulations by which it provides service are
j ust, reasonable, nond iscri m inatory, and non-preferential.
When ldaho Power owns an asset, and that asset is determined to be prudently
incurred, that asset is allowed to be included in the Company's rate base for rate making
purposes. The Company is then allowed to earn its authorized rate of return and recover
that retum, cunently 7.86 percent, through retail customer rates over the depreciable life
of the asset. When the Company enters into a power purchase agreement ('PPA'),
assuming that PPA is considered prudently incuned for rate making purposes, the cost
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 18
of the PPA is eligible for recovery from customers as a pass-through cost. There is
cunently no mechanism for providing ldaho Power a return on or financial earnings on a
PPA. As a result, ownership of the 120 MW BESS wil! provide an opportunity for the
Company to eam its authorized rate of retum on the investment as compared to no return
under the PPA. While the loss of the return on the 120 MW BESS would represent a one-
time Iost opportunity to support the earnings of the Company, ldaho Power is more
concerned with the longer-term policy implications of transitioning to a regulatory model
that favors third-party ownership over utility ownership.
ldaho Power competes with other companies and industries for access to debt and
equity capital markets, and analysts and investors would quickly lose interest in a utility
that has diminished earnings power on assets and thus negative future prospects. This
would, in turn, increase the cost of debt capital and decrease the value of the Company's
equity capital, increasing ldaho Power's overal! financing costs and diluting its
equity. Based on analyst commentary in the utility sector, even the signaling of favoring
such an approach by a regulatory commission could result in significant harm to access
to cost-effective capital. The potential long-term negative financial impact of such a policy
shift is immeasurable, but substantial.
The response to this Request is sponsored by Tim Tatum, Vice President of
Regulatory Affairs, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 19
REQUEST FOR PRODUCTION NO. 11: Please provide a summary of the
Company's experience in operating and maintaining grid scale battery energy storage
systems.
RESPONSE TO REQUEST FOR PRODUGTION NO. 11: ldaho Power does not
have experience in operating and maintaining grid scale baftery energy storage systems
however the installation of a battery storage system at a distribution substation this year
will provide the Company's first-hand experience with operation and maintenance of a
smaller scale system.
The response to this Request is sponsored by Jared Ellsworth, Transmission,
Distribution & Resource Planning Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 20
REQUEST FOR PRODUGTION NO. 12: Please describe the risks associated
with owning and operating grid-scale battery energy storage systems.
RESPONSE TO REQUEST FOR PRODUGTION NO. 12: As explained in the
Company's Response to Request for Production No. 11, ldaho Power does not have
experience in operating and maintaining grid-scale battery energy storage systems.
Because of that, as required under the RFP and the arrangement with Black Mesa, the
Company will enter into an operation and maintenance services agreement ("OMA") for
the 40 MW BESS with Powin for quarterly and annual preventative maintenance, warranty
work, and other services. Powin will provide the same services for ldaho Power's 80 MW
BESS as well.
The response to this Request is sponsored by Eric Hackett, Projects and Design
Senior Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 21
REQUEST FOR PRODUCTION NO. 13: ldaho Power required that projects that
included a PPA for wind and solar also include the transfer of ownership for the storage
resource. Hackett Direct at 8.
a. Please explain the operational, reliability, and financial advantages and
disadvantages for the transfer of ownership requirement.
b. PIease explain how the transfer of ownership requirement impacts customers.
c. Could a lower cost lower risk alternative have been achieved without the
transfer of ownership requirement? Explain.
RESPONSE TO REQUEST FOR PRODUCTION NO. 13:
a. Please see the Company's Response to Staffs Request for Production No. 3
for a discussion of the operational and reliability impacts of Company
ownership. Please see the Company's Response to Staffs Request for
Production No. 10 for a more detailed discussion of the financial impacts of
ownership as compared to third-party ownership.
b. See (a) above.
c. No. As explained in the Company's Response to Staffs Request for Production
No. 3, because of the limited time available to procure resources necessary to
meet the 2023 capacity deficit and ldaho Power's obligation to provide
customers with reliable service, the Company does not believe a PPA
agreement without a transfer of ownership requirement for the baftery storage
component would have presented a viable lower cost, lower risk option to
reliably serve expected load requirements.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 22
The response b this Request is sponsored by Tim Tatum, Vice President of
Reguhbry Afiairs, ldaho Power Company.
IDAHO POWER GOMPAT{YS RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF.23
REQUEST FOR PRODUCTION NO. 14: Jared Ellsworth's testimony states: "A
key assumption used to develop the load and resource balance for the Second Amended
2019 lRP was that ldaho Powe/s exit from coal-fired operations at Valmy would free up
transmission capacity for imports to ldaho from the Southem Hubs. To reflect recent
market changes, the Company eliminated this key assumption, and assumed ldaho
Power could only rely on access to the Southern Hubs to provide 50MW of capacity in
the summer months.' Ellsworth Direct at 10.
a. Please explain why the Company assumed, in developing the load and
resource balance for the Second Amended 2019 lRP, that its exit from coal-
fired operations at Valmy would free up transmission capacity for imports to
ldaho from the Southem Hubs.
b. PIease describe in detail the "recent market changes" referred to in Jared
Ellsworth's testimony on page 10 and detailed on page 23 of his direct
testimony.
c. Please explain why the Company did not have firm capacity secured from the
Southem Hubs independent of Valmy.
RESPONSE TO REQUEST FOR PRODUCTION NO. 14:
a. Energy from the North Valmy Power Plant ("Valmy") is scheduled to ldaho
Power on the Valmy to Midpoint 345kV line. ln the Second Amended 2019 lRP,
each Valmy unit exit was assumed to make available approximately 130 MW
of transmission capacity for purchases from southwest markets. The
assumption was that generation from Valmy could be replaced by market
purchases from southern market hubs. The Company historically has
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 24
purchased energy from the Southern Hubs during summer peaks less
frequently.
As described on page 18 of the Second Amended 2019 lRP, underthe section
titled Valmy Unit 2 Exit Date, and on page77, under the Nevada Transmission
without North Valmy section, it was recognized these assumptions required
future testing. As described in Mr. Ellsworth's testimony, the Company issued
an RFP on April 26,2021, for the delivery to ldaho of firm capacity and energy
during the summer months through 2025 to help determine whether
transmission availability exists to import from the market to maintiain reliability
and at a price that is economica!. However, ldaho Power received no bids,
indicative of evolving market conditions.
b, As described in Mr. Ellsworth's testimony, market conditions changed following
the August 2020 energy emergency event. Understianding the importance of
transmission availability during times of high electricity demand, third party
entities began reserving transmission capacity across the west including just
outside ldaho Power's border. This reduced the Company's access to market
hubs. Prior to this rush by other entities to reserve available transmission,
ldaho Power was able to rely on third party transmission being available in real
time for market imports. To reflect the recent market changes, the Company
changed its key assumptions regarding transmission availability beyond its
border.
c. Prior to the exit of Valmy Unit 1, the south to north capacity on the Valmy to
Midpoint 345kV line was fully utilized by ldaho Powe/s share of Valmy. Given
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 25
this constraint, reserving capac;ity fiom the southem hubs to ldaho Power was
not an option. Additionally, this capaoty is rcserved and fully utilized by NV
Energy.
The response to this Request is sponsorcd by Jared Ellsworth, Transmission,
Distribution & Resoutre Planning Director, ldaho Power Gompany.
IDAHO POVUER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
coMMtssroN STAFF-26
REQUEST FOR PRODUCTION NO. 15: Please provide a copy of the pre-bid
presentation. Hackett Direct at 10.
RESPONSE TO REQUEST FOR PRODUGTION NO. 15:
Please see Attachment 1.
The response to this Request is sponsored by Eric Hackett, Pnojec{s and Design
Senior Manager, ldaho Power Company.
IDAHO POVVER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 27
I
Disclaimer and Confidentiality
. The information contained in this Request for Proposals (RFP) is presented to assist interested parties in deciding
whether or not to submit a proposal. tdaho Power Company (lPC), an operating company subsidiary of
lDACORBlnc., is issuing this RFP to solicit formal proposals from qualified companies (each a Respondent) and does
not representthis informationto be comprehensiveorto contain all of the informationthat a Respondent may
need to consider in orderto submit a proposal. None of lPC, its affiliates, or their respective employees, directors,
officers, customers, agents and consultants makes, or will be deemed to have made, any current or future
representation, promise or warranty, express or implied, as to the accuracy, reliability or completeness of the
information contained herein, or in any document or information made available to a Respondent, whether or not
the aforementioned parties knew or should have known of any errors or omissions, or were responsible for their
inclusion in, or omission from, this RFP.. Respondent acknowledges and agrees that all information obtained or produced in relation to this RFP is the sole
property of IPC and shall not be released or disclosed to any person or entity for any purpose other than providing
a proposalto lPCwithoutthe express written consent of lPC. Respondentagrees not to make any public comments
or disclosures, including statements made for advertising purposes, regarding this RFP to the media or any other
party without prior written consent of ! PC. I n the event Respondent receives any inquiries regarding this RFP from
the media or any other party, said inquiries shall be forwarded to tpC.. !f and to the extent that information presented or statements made in this presentation conflict with the terms of
the RFP and related documents, the RFP and related documents shall govern
Agenda
. lntroductions. Background. RFP Key Components. Product Requirements. Evaluation Fee and Proposals. Portal Overview. Proposal Evaluation & Timeline
RFP Team
iiltch Colburn
VP of Plonnlng, Englneeilng
&bnstructlon
ldaho Power bmwny
Edc Haclctt
ProlecBdril hslgn *. lvbnoger
Plonning, Et gircedtp, & C-ot sfirctton
ldaho Power @mpny
l(lmAhtott
Sr, Contacttng Agent
Orymtio'rs tuturcment, SuMy Cluin
ldoho Power Compony
Paul ilbxwcll
Manoging Diredor
Blo* & Veoth lv/ornoge m ent
Consulting
t({ii,l.l
Background
. IPC continuesto experience customer growth and an increasing peak
dema nd fo r el ectricity.. Recent changes in the regionaltransmission markets have impacted the
abilityto import energy from western market hubs for delivery to the
IPC system.. The addition of new resources to meet peak demand is critical.. The need for additional capacity resources has been identified asearly
as Summ er 2023 at approximately 80MW.
Product Requirements
Product Type
Ownershi
Resource Status
Agreement
First Delive
I nte rconnection
Du ration
Price Escalation
Other
Prici ng
Delive Point
Product
AssetPurchase
newwith
20 30 4 20
Min:1 iIW, Max:80 MW
Within the boundary of the IPC Balancing AuthorityArea (BA), oroutsidewith all
Minimum l cycle perday
None
ln
Partial Asset Purdrase
with orSGIA
20
tothe BA
o
Electric Interconnection and A reas
A Respondent must
understand and include
durations and costs of the
! PC electric interconnection
standards
Mustinclude costof
I nterconnection Customer's
I ntercon nection Facilities
("1 Cl F") and Transmission
Provider I ntercon nection
Facilities ("TPlF")
IPC will estimate Station
Network Upgrades ("SNU")
and Delivery Network
Upgrades ("DNU")
J Prcferred
ffiffi Less Preferrcd
! LeastPreferred
ffik.ntn*d.dlr..lr*[e-mail] "hlrr.dlo..hH6rffiybbd.nir.deXdkffin&ffie
a
Lahr
hd.
bLn&orrlr}lm
llsilh
1tu5..1x.rrrr*,
aaaaa-dr
Ctrarll.dr|,n
ddtlb
l't'aq.c'.alliV
GT
East Ore8on/West TV
l6t[4.rr
Lad,
Srjia
a
Most Valuable Hours
Approximate identified capacity deficit: 80 MWas of Summer 2023
I Critical Hours:Thesearethecritical need hoursforldahoPower'scapacitydeficit
ffi Valuable Hours: These are in addition to critical hours; IPC's analysis willfavor resources that can meet
both the critical hours and the valuable hours
o 1 2 3 I 5 6 7 8 I 10 11 7:t 1:l L4 15 15 t7 18 19 n 2t x2 23
IrrnrY
Febnsy
i,lrdr
Aod
i,lay
lrre
ldv
Anrlt
Seoer$er(hber
llotenter
ttsernber
Evaluation Fee and Proposals
. A non-refundable S10,000 Evaluation Fee is required with each Proposal. A Proposal is considered the aggregate of the information provided in the Proposal Entry Form (PEF) and uploaded
by Respondents to the Portal
. The number of Proposals and Evaluation Fees are determined usingthe following rules:
Differentcapacity, initial deliveryyear, POD or price DifferentProposal
Project # of Proposals
Different Product at the same site Different Proposal
Proposal Naming
. Mustenter the basic proposal information on the Commercial tab of the PEF
. A unique ProposalCode will be created foreach proposal
ProductType
ProposalName
Delivery level
New or Bisting Facil
ProductCode
PrcposalCode
. The resulting Propos al Code must thereafter
File Name of each document uploaded (e.g
PVS
& must be inserted into the
Solar PV plus Storage Pleose Seled
Heritage
Transmission Pleose Seled
New Pleose Seled
T_N_[File
Portal Overview
. Respondents can download RFP documents via the "1. Download Documents" tab, lncluding the PEF.
. Supporting Documents (commercial, technical and pricing data) in response to requests in PEF must be uploaded
to the "2. Upload Documents" tab, including the PEF.
. Respondents are directed to the "3. Commercial Data" tab to indicate participation in this RFP by July 28,2021
. All information exchanged between the Respondent & IPC concerning the Solicitation must only be via the Portal
using the "Messaging Tabl
Ofts;'"
ll653f :ZfrH All Sourcc Rqprcril l0r Prcpocdr for Pcak CeprctU Rcouros
Open: llGf,lo4ll 0C:15 Ptl (EIDT) Closs: @r1u2l 06:00 PM (EDT) Tme RemahIE: 33 days 4 lurrs t5 mir 22 sgcs
BuyerContece lGmAbbd
SfaarilDownloadtlocuments 2.UploadDocuments:3Commercial Oata , r:',i:.'"''| . 1',,,Messaging
Other Requirements
. Data and Cyber Security
. P u rch as i ng Rest rictions/P roh i b ited Tech n o logy
. Financial and Credit Information
. Provide exceptions to the:
- Draft Term Sheet
- Tech nica! Specifications
-- Draft Form Letter of Credit
Proposal Evaluation
Threshold Screenine
Proposed product is not compliant
with the Product definitions;
Substantial number of data fields
in the Portal are incomplete;
Key information necessary to
complete a com prehensive
evaluation have not been
uploaded
Qualitative & Quantitative Eval uation
Project Feasibility;
Project Capability;
Counterparty Profile;
Com m unity Stewa rds hip;
Price & Over:all Cost to IPC
a
a
a
a
a
a
Schedule
Milestone Date
Portalopened for interested party registratiorr arrd
comnrunication
RFP and other Solicitation documents posted to the Portal
Respondent I ntent to Bid Due
Pre-Bid Presentation Recording posted to the Portal
Deadline for SLrbmittalof Questions, and participation
declaration (after which IPC may not Resporrd)
Deadline for ProposalSubmittal- Portal closed to f urther
posting by Respondents, evaluation begins
June 30,2021
July L2,2027
August LL,TOTL by 4pm Mountain Time
Helpful Links
. Web help & guide for using the Portal
- https://www.poweradvocate.com/WebHelp Sourcins lntel/Content/Resources/
Sourcine lntel Supplier Guide.pdf
. Supplier quick start guide
* https://www.poweradvocate.com/WebHelp Sourcing lntel '^ontent/Resources/
Sourcing lntel QuickStart Supplier.pdf
. Supplier FAQ's
- https://www.poweradvocate.com VebHelp Sourcine lntel ' ntent -osources
Sourcine lntel FAQ Supplier.pdf
REQUEST FOR PRODUCTION NO. 16: Please identify potentia! events that
could cause the BESS resources from not meeting their intended operation date. Please
describe the likelihood of these events occuning, their potential impact, and the
Company's contingency plan(s) to address them.
RESPONSE TO REQUEST FOR PRODUCTION NO. 16: ldaho Power has
contracted with Powin Energy Corporation ("Powin') to manufacture and deliver the
BESS. The Powin agreement includes a mandatory in-service date and liquidated
damages for any delays. Powin has executed purchase orders with oversea battery cell
suppliers and has started manufacturing in North America. Powin has provided no
indication that the commercial operation date of June 1 ,2023 is not achievable. ldaho
Power anticipates breaking ground in July and August 2022 to begin sitework, fencing,
concrete foundations, and conduit installation in preparation for deliveries of BESS
equipment beginning in November 2022.
The response to this Request is sponsored by Eric Hackett, Projects and Design
Senior Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISS]ON STAFF - 28
REQUEST FOR PRODUCTION NO. 't7: What are the expected usefu! and
depreciable lives of the projects?
RESPONSE TO REQUEST FOR PRODUGTION NO. 17: ldaho Power has
assumed a 20-year life in analyses of large-scale battery storage.
The response to this Request is sponsored by Tim Tatum, Vice President of
Regulatory Affairs, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 29
REQUEST FOR PRODUCTION NO. 18: Please provide copies of all bids the
Company received and the analysis the Company performed in selecting the resources.
RESPONSE TO REQUEST FOR PRODUGTION NO. 18: Please see the
attached confidentia! files for all bids received in response to the RFP. Please see
ConfidentialAftachments 9 through 13 to the Company's Response to lClP's Production
Request No. 1 for the workpapers and analysis used to conduct the selection process.
ln addition, please see ConfidentialAttachment 1 to the Company's Response to
Request for Production No. 1 for the analysis performed to compare the self-build option
against proposals received in response to the RFP.
The response to this Request is sponsored by Eric Hackett, Projects and Design
Senior Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 30
REQUEST FOR PRODUCTION NO. 19: Referencing the analysis determining
battery storage to be Ieast cost, please provide the life span used for baftery storage and
the documentation supporting this conclusion.
RESPONSE TO REQUEST FOR PRODUCTION NO. 19: All the battery storage
systems analyzed were large-scale and assumed a 20-year life span. The 20-year life
span was based on discussions with vendors who suggested it was industry standard
and also evidenced in PPA's that suggested a 2O-year term based on the battery Iife.
The response to this Request is sponsored by Donna Wheeler, Accounting
Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 31
REQUEST FOR PRODUGTION NO. 20: Please provide the depreciable Iife the
Company will use should these projects be built and the documentation to supporting this
determination.
RESPONSE TO REQUEST FOR PRODUCTION NO. 20: ldaho Power has
assumed a depreciable life of 20 years for both the 40 MW BESS and 80 MW BESS
based on the industry standards for larger-scale battery storage systems. Please see the
Company's Response to Staffs Request for Production No. 19 for an explanation on the
determination of the depreciable life.
The response to this Request is sponsored by Donna Wheeler, Accounting
Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 32
REQUEST FOR PRODUCTION NO. 21: Please provide what the planning
reserve margin ("PRM') would be if the Company used a Loss of Load Expectation
('LOLE') of 1 day in 10 years instead of 1 day in 20 years LOLE. Please also provide the
first deficiency date using the PRM from a 1 day in 10 years LOLE.
RESPONSE TO REQUEST FOR PRODUGTION NO. 21: lf the Company used a
LOLE of one day in 10 years instead of a LOLE of one day in 20 years, the PRM would
be approximately 13.44 percent. Utilizing a one day in 10 years instead of a one day in
20 years LOLE, and factoring in the 76 MW purchase referenced on page 25 of the Direct
Testimony of Mr. Ellsworth, would move the first deficiency date to 2024, rather than 2023.
However, the 2021 lntegrated Resource Plan ("lRP") would have still identified 2023 as
the first deficiency date because the 76 MW was a late-2021 operational purchase
opportunity that was not factored into the lRP.
The response to this Request is sponsored by Jared Ellsworth, Transmission,
Distribution & Resource Planning Director, ldaho Power Company.
]DAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 33
DATED at Boise, ldaho this Sth day of July 2022.
fuzhhtt\-
DONOVAN E. WALKER
Attomeyfor ldaho Power Company
IDAHO PO\'\'ER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
coMMrssroN STAFF-34
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 5th day of July 2022,1 served a true and correct
copy of ldaho Power Company's Response to the First Production Request of the
Commission Staff upon the following named parties by the method indicated below, and
addressed to the following:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 35
Commission Staft
Dayn Hardie
Riley Newton
Deputy Attomey General
ldaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg No. 8,
Suite 201-A(83714)
PO Box 83720
Boise, lD 83720-0074
Hand Delivered
_U.S. Mail
_Ovemight Mail
_FAXX FTP SiteX Email: [e-mail]
Ri lev. N ewton@ p uc. ida ho. qov
lndustrial Customers of ldaho Power
Peter J. Richardson
515 N. 27th Street
Boise, ldaho 83702
_Hand Delivered
_U.S. Mail
_Ovemight Mai!
_FAXX FTP SiteX Emai!: [e-mail]
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
Hand Delivered
_U.S. Mail
Ovemight Mail
_FAXX FTP SiteX Emai !: [e-mail]
Micron Technology lnc.
Austin Rueschhoff
Thorvald A. Nelson
Austin Jensen
Holland & Hart LLP
555 17th Street, Suite 3200
Denver, CO 80202
Hand Delivered
_U.S. Mail
_Ovemight Mail
_FAXX FTP SiteX Emai!: [e-mail]
tnel so n @ ho I la nd ha rt. co m
awiensen@ holland hart. com
aclee@holland hart.com
Jim Swier
Micron Technology, lnc.
8000 South FederalWay
Boise, ldaho 83707
Hand Delivered
_U.S. Mail
Ovemight Mail
_FAXX FTP SiteX Email: [e-mail]
ldaHydro
C. Tom Arkoosh
Amber Dresslar
Arkoosh Law Offices
913 W. River Street, Ste. 450
P.O. Box 2900
Boise, lD 83701
Hand Delivered
_U.S. Mail
_Ovemight Mail
_FAXX FTP SiteX Emai!:[e-mail]
Amber.d [e-mail]
[e-mail]
ldaho Conservation League
Marie Kellner
Emma E. Sperry
ldaho Conservation League
710 N.6s Street
Boise, ldaho 83702
Hand Delivered
_U.S. Mai!
Ovemight Mail
_FAXX FTP SiteX Email:
m kel! ner@ ida hoconservatio n.o ro
esoenv@ id a hoco n se rvatio n . o rq
\to.* &^^t.
Stacy Gust, Regulatory Administrative
Assistant
IDAHO POWER COMPANY'S RESPONSE TO THE F]RST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 36